A Halifax landlord is using fixed-term leases to evict multiple tenants and increase rents in their units by more than 25%.
Peppermint Properties, owned by Louis Wolfson, lists a residential portfolio of 17 buildings on its website, all of them on the peninsula. The Halifax Examiner has spoken with five tenants at three of those buildings, all of whom have been notified their fixed-term leases won’t be renewed. Rents for their units are increasing 28 to 46%.
Jonny Hird, a photography student, has been leasing a Peppermint Properties apartment near the Halifax Forum since September 2021. He hoped to stay.
“I was really enjoying it. Ever since I moved to Halifax I’ve moved pretty much on an annual basis, which is not fun, packing your whole life up every year,” Hird said in an interview.
“After my first year, they moved me from an annual lease to a fixed term. I just stupidly signed that, I didn’t realize what that meant at the time.”
Fixed-term leases allow a landlord to end a tenancy for no reason at the end of the term. Since Nova Scotia implemented a 2% cap on rent increases, in place until the end of 2023, landlords been using the leases to create turnover and increase rents between tenants.
‘Plans for the building’
Earlier this year, Hird found out the hard way, when Peppermint Properties informed him they wouldn’t be renewing his lease this September.
“I emailed them quite a few times, like inquiring about it. Why aren’t they leasing out this apartment? Why aren’t they leasing it to me? I mean, I haven’t missed rent once in two years. I haven’t gotten a single complaint once in two years,” Hird said.
“They said there was plans for the building. But wouldn’t specify further when I asked what the plans are.”
Hird said he was “dubious” of the claim, but thought maybe they were renovating the building.
“It wasn’t until a few weeks ago when I saw my apartment posted online that I realized no, I was just being lied to. And just being forced out just so they could up the rent,” he said.
“It’s going from $1,320 which I pay now and with the 2%, that would have been $1,350 but instead it’s $1,695 now, so 28% increase in two years.”
There’s a listing on the Peppermint Properties website for a one-bedroom unit in Hird’s building for $1,695.
Another tenant in Hird’s building told the Examiner they got the boot, too. Their rent is $1,300, including parking. The unit is now advertised for $1,695, with an extra $125 for parking — a 40% increase, total.
“It just feels like a really blatant dick move to force people out of their apartments using the fixed-term lease loophole,” Hird said.
“The plan is, ‘We’re gonna make more money.'”
Hird isn’t the only tenant to hear about “plans for the building.”
Similar story from a tenant in another building
Diana Devlin lives down the street from Hird in another Peppermint Properties building. She leases a two-bedroom, two-bathroom apartment with her 92-year-old mother.
Devlin first started leasing a one-bedroom unit from Peppermint Properties in December 2018. During the pandemic, Devlin wanted to move her mother in with her, and sought a larger unit in the same building. They moved into that apartment in September 2020.
In September 2022, when their lease was up for renewal, Peppermint Properties gave them a fixed-term lease. Devlin was just out of her job at a local housing non-profit, and having health issues.
“When the fixed-term lease came in, I didn’t really do anything about it,” she said.
“I didn’t have really the bandwidth to deal with the situation at that point in time.”
Devlin didn’t think anything of the fixed-term lease until she received a letter notifying her that the lease would not be renewed.
She was surprised, but not entirely. There’s been a lot of development in the area lately, and she figured maybe her building was next.
40% increases in rents
“Eventually I reached out to the admin to ask, was there anything wrong with the tenancy what was going on? And she said, ‘Oh, no, no, no. We’re asking people to leave. The owner has plans for the building. It’s nothing personal. It’s just that the owner has plans for the building,'” Devlin said.
Devlin heard from a neighbour that the landlord had chosen “a number of people throughout the portfolio,” and not renewed their fixed-term leases as part of a “plan to jack up the rent above the 2% that he’d be allowed to do with the rent cap.”
The administrator told Devlin she and her mother had been “excellent tenants,” and they’d like to keep them. She offered them units between $2,300 and $2,600 for two-bedroom one-bathroom apartments.
Devlin and her mother were paying $1,800 for their apartment. It’s now listed for $2,600 — a 44% increase. It’s one of 20 apartments currently listed on the Peppermint Properties site.
Another tenant in Devlin’s building told the Examiner that Peppermint Properties declined to renew their lease, too. Having lived in the building since 2021, they were paying about $1,500 after a 2% increase last year. The unit is now advertised for $2,195 — a 46% increase.
And a tenant in a Peppermint Properties building on Oxford Street told the Examiner seven out of eight tenants in their building have had the landlord end their leases. The rent for their one-bedroom unit is increasing from $1,800 to $2,500 — 39%.
Landlord says costs are up
The Examiner called and emailed Peppermint Properties seeking an interview with Wolfson, the owner, but didn’t receive a response.
Devlin, however, was able to speak with Wolfson earlier this month.
“He said, ‘This is my business. This is my company. And I get to make choices about what works for my business. And you have to understand that prices have gone up across the board. Everything’s gone up 30 to 40%. You know, I have to make business decisions and financial decisions that make sense for my business,'” Devlin said.
Devlin told Wolfson costs are up for tenants, too.
“And so this is also hard for myself and a 92-year-old woman to go out in this economy and go out in this housing market and this vacancy rate and try and find housing, as well,” she said.
Devlin said she asked Wolfson why he didn’t talk to her about a rent increase.
“I wouldn’t have been able to keep you in the unit anyway, because I would have had to keep the rental increase to under 2%,” he told her. “And I need to get more than a 2% increase in that unit. So there was nothing to talk about.”
“He clearly was not thrilled with being being asked to talk. He didn’t want to have to talk to me at all,” Devlin said.
Dal Legal Aid calls for Nova Scotia to follow BC’s lead
Katie Brousseau is a community legal worker at Dalhousie Legal Aid. What Peppermint Properties is doing isn’t unique, she said. It’s something she hears about every day.
“This is an issue across the board in Nova Scotia,” Brousseau told the Examiner in an interview.
“And honestly, I think it comes down to a gap in our legislation because in Nova Scotia … landlords aren’t obligated to renew a fixed term lease.”
In BC, landlords aren’t automatically able to kick tenants out at the end of a fixed-term lease. They can only include a vacancy clause in the lease if they or a family member plan to move into the unit or if it’s a sublease. Otherwise, if the tenant agrees, the landlord can start a new fixed-term lease. If there’s no new agreement, the lease reverts to month-to-month.
“I think that there is a strong case to be made for Nova Scotia to follow BC’s example because it’s clear we need those protections for tenants because it’s being exploited, really on a daily basis,” Brousseau said.
Don’t sign a fixed-term lease
If a landlord presents a tenant currently on a periodic lease with a new fixed-term lease, Brousseau said the tenant shouldn’t sign it.
“If you have a periodic lease, so month-to-month, year-to-year, there is virtually almost no incentive or reason for a tenant to agree to a fixed-term lease because you’re surrendering your security of tenure in doing so,” she said.
But Brousseau doesn’t think the government needs to ban fixed-term leases altogether.
“I don’t think fixed term leases are inherently evil. There was an intended purpose for them,” Brousseau said.
Fixed terms make sense for students, people in the military, and others living here for a short period, Brousseau said, but not for long-term tenants.
“It really makes those tenants much more vulnerable to losing their housing,” Brousseau said.
As a tenant, Hird would like to see the government ban fixed-term leases outright.
“If you’re going to implement a rent cap, and then you allow fixed-term leases, there’s no rent cap. People just have to move,” he said.
Devlin said she doesn’t think the government is closing the fixed-term lease loophole because “so many of the political folks in Nova Scotia are also from the development world, the property ownership world.”
“They’re pretty joined at the hip here,” she said.
“No government is going to have any political will to address the housing issue.”
Government declines interview request
The Examiner asked for an interview with Colton LeBlanc, the minister responsible for Service Nova Scotia and the Residential Tenancies Act. Spokesperson Blaise Theriault declined the interview request and provided a statement instead:
We recognize the challenging situation these tenants are in.
The purpose of fixed-term leases is for situations where the tenant is not staying long term which is why they have a defined start and end date. Unfortunately, some landlords are using them so they can raise the rent above the two per cent rent cap. This was not the intended purpose of a fixed-term lease.
The rent cap was introduced to help our most vulnerable during the pandemic. It was then extended while we worked to address the housing crisis. We appreciate the rent cap has been a challenge for some landlords but using fixed-term leases to circumvent the rent cap is not what they are for.
It is very important for both tenants and landlords to understand what they are signing when they enter into any lease.
We’re always looking at ways to strengthen the Residential Tenancies Program while balancing the needs and interests of both tenants and landlords, and are exploring ways to help protect tenants while alleviating the pressure of inflation for landlords.
After a cabinet meeting last month, LeBlanc said it was “a bit frustrating” to hear landlords were using fixed-term leases this way,” and the government is “aggressively looking at the need for a compliance enforcement division.”
Mr. Wolfson just went through a very costly (and public) divorce. You do the math. That doesnt make this right, but it does explain his motivation.
I use fixed term leases and 99.5% of my tenant’s got renewed this year with a 2% increase. When I dont renew, it’s usually because the tenant is a “worst in class” pain in the rear. Loud music at 3am and ignoring requests to stop doing it; harassing my employees and making their life miserable; being a creep with women in the building, etc. The Tenancies Board takes way too long, and most of the time the process doesn’t work (i.e., how do you prove someone is a creep?). One bad tenant can make life miserable for many other good tenants around them, so when a polite warning or two to stop doesnt work, we terminate the lease.
The other useful purpose for a fixed term lease is the short term scenario. a tenant wants to renew a lease, but only for 4 months, 9 months whatever. I have also signed 5 year leases in the past, and done custom renovation work to suit that tenant.
The final issue with a year to year or month to month lease is that the tenant has the right to vacate the premises with 30 days notice. this is unfair to landlords. if you get notice to vacate Dec 30th and have to rent a unit Feb 1st, you are likely going to see some vacancy, as the best tenants are applying for apartments 2 or 3 months in advance of their move in date, and that is a slow time for renting.
Like most things, there are three sides to this story.
Rent control has a lot of problems (just like the property tax assessment cap). It creates winners and losers. The winners are the tenants with good incomes who could afford to pay more rent when the property tax assessment goes up 15-20% (like it did this year in many buildings). Instead, everyone gets artificially subsidized rents. The only logic response to this is to charge a lot more for the next unit when the tenant vacates (for us, only when they chose to move out). We have many situations now where the new tenant is paying a lot more money than the old tenant, even though they essentially have the same apartment. Rent control forces the new tenant to subsidize the old tenants (whether they need a subsidy or not).
the other issue is that rent control at 2% means a tenant in a $700 a month apartment (yes, I have a number of these) pays another $14 per month. These units are usually in old energy inefficient buildings, so its doesnt come close to covering the increased operating costs. A new apartment renting for $2,200 per month would get a $44 increase, and yet their operating costs are less susceptible to increases in oil/natural gas as they have new windows, new hearting systems, etc). There needs to be a way for older buildings to catch up to rising operating costs.
The only thing worse would be disallowing any rent increase when someone moves out. Once the landlord cannot increase rent to catch up to the market (i.e., the next tenant pays the old rent plus 2%), then all incentive to invest any money in a building disappears. This is what has been documented in the many places that have long term rent control – the buildings slowly fall apart. Even the costly new landlord license program wont help if the 50 year old kitchen cabinets, or toilet is functional – they will stay that way.
SOLUTIONS?
– More government funding for nonprofit housing
– provide a rebate for some or all of the HST on housing. New apartments cost $350,000 to $400,000 EACH these days. HST is $40,000 to $50,000 of this cost.
– Remove rent control but have some control to stop tenant renewals at 25%+ increases, that is not necessary.
– EDUCATION, EDUCATION and SKILLS TRAINING. If someone cant afford $1,200 to 1,500 a month in rent, the issue is likely that they arent earning enough income. Operating costs are $400 to $700 per month per apartment (the landlord does not keep this money, but gives it to NSpower, HRM, Halifax Water, insurance, repairs, etc). Only the rent above these costs is available to a make a mortgage payment. So even if you get given a free building (no mortgage) you still need $400 (old building) to $700 (new building) just to breakeven. There are plenty of jobs available for people with the right skill set. We need to get more people in a position to be able to earn a decent living so they can pay a market rental rate.
I could go on . . . .
Shameful behavior by landlords that do this. Even more shameful that the goverment did not foresee these kinds of abuses. What are they looking at? Put in legislation tomorrow that would prevent this kind of abuse. The vote would 55 – 0.